Thursday, July 30, 2015

July 29, 2015 As Obama slowly dismantles the Ex-Im Bank, Boeing becomes one of the first considering moving part of its operations overseas the satisfy the Stupid Party wishes. Obama will use the Ex-Im money to cover additional welfare but not the cost of all the American jobs that will be lost. No need to worry though because Obama agrees with Putin that more people on a government handout will strengthen the central government and increase voter turnout. The “stupid party” says that it is self evident in countries like Iran and Russia where up to 98% vote, that most of them vote for the government’s socialist leader. The US Constitution requires the American President to present his requested budget to Congress for approval. So obviously all a President and his Stupid Party Congressional members need to do is to do nothing as usual when they think welfare not jobs bring in more votes than jobs do. Trump claims that stupid fascist socialist attitude is another example of gross incompetence of this administration.

 
Pending Home Sales Jun -1.8% after stupid-party commentators said it was at least 1.5%.
     Stupid party FOMC Rate Decision July; was nothing as usual.
     Stagnation and unemployment is happening as usual now for the last six years.
     Jul 30 8:30 AM GDP-Adv. Q2 2.3% after -0.2% last month for a 1% annual rate.
            July 28, 2015  Consumer confidence plunged in July and the Conference Board's index of consumers' perceptions fell sharply from June’s 99.8 to 90.9 mostly because of a sharp deterioration in their short-term economic outlook?  Probably not!  More likely it is due to the growing incompetence of the Federal administration when it comes to monitoring the economy and the reports because good news is politically correlated with speeches and the news has to be corrected later.
       Analysts optimistically predict the Shanghai Composite Index will sink only another 8.5 percent after plunging Monday.  That would extend the decline to 38 percent.   It is optimistic none-the-less because none of the analysts are looking at daily 1929 market lows they are using daily or weekly 1929 market averages.  The absolute daily low during FDR’s Great Depression was 95% below the absolute daily high at the peak before the depression.   In reality we are now seeing all major world markets begin to decline together.  The NYSE broad market first saw cash leaving last October.   Now we are seeing opportunities evaporating and people wisely reducing Stock Market investments until this is over.
http://www.bloomberg.com/news/articles/2015-07-27/demark-sees-14-china-plunge-as-stocks-mirror-1929-u-s-crash
      Brent oil price shrank to a new five year low.
      Durable Goods -ex transportation Jun 0.8% up from -0.1%
      Case-Shiller 20-city Index May flat at 4.9%
          The “stupid party government” analyzes Trump’s assets in an attempt to identify all his holdings so that their brown shirt supporters can continue to demonstrate and create havoc such that Trump businesses lose money.  Of course all the loses are blamed on Trump’s candidacy in order to economically destroy him because he is planning to clean house in Washington and launch the biggest investigation into criminal government activities in US history.   Hitler’s Brown Shirts are the model for the “Stupid Party” demonstrators.
         Massive hacks have occurred.  The evidence has already been downloaded overseas, and will provide the proof of and timing of the current administration’s ongoing destruction of government records that the proof of the deliberate criminal harassment of opponents of the “stupid party.”  Obama and Hilary have now requested that all the NSA records be destroyed but apparently copies were saved to support an honest and thorough US government investigation once the current corrupt government is replaced.  US NATO allies, Korea and China are a lot smarter than incompetent Washington officials think.  They know how dangerous fascist socialists are.   Fascists are socialists that allow and use capitalists to corruptly control wealth.  It is called crony capitalism.   That is how Obama milks banks and other industries threatening lawsuits and fines.  Copies will make it easy to identify the material requiring analysis because the incriminating Washington records have been the primary records being destroyed so far.  They are destroying records not to protect the innocent victims of the administration but to protect the corrupt government officials who ordered the illegally taping the State Governments of Wisconsin and New Jersey as well as contributors to groups opposed to the corrupt government or groups just standing up for the American Constitution.  Every fascist government controls the press and attempts to destroy good and honest people with their stupid fascist party’s hoodlum demonstrations and planted hecklers.
http://www.wired.com/2015/07/nsa-destroy-phone-records-illegally-collected/
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Monday, July 20, 2015

July 24 2015 The next two weeks look to be a probable test period for the world stock market bubbles. It is a time to keep vigilant. When over-reactions occur in certain strong company stocks they create opportunities to buy. But as a bear market matures, usually it is better to sit it out until the final collapse. Normally a bear market recovers after a sharp sell off. But unless America elects a competent administration in 2016 this will likely go down as Obama’s Great Depression. Books will be written about the incompetence and corruption prevalent in the Stupid Party and others today.

If you have followed us you were primarily in cash and may have shorted some stocks already or have gone into a few bearish ETFs.  We do not make specific recommendations.  
          July 23, 2015    The world governments are in reflation mode, but it is obvious from the decline in commodity prices that reflation is failing and every major world economy is headed for depression mode instead on the horizon.  Reflation plus depression was the Weimar Republic’s and the Zimbabwe’s recipes for hyperinflation.  But that kind of disaster would require someone like a Hilary Clinton to accomplish.  Trump is the only one who apparently can cut through all the Clinton-Obama political bullshit.  But it will unfortunately take a crashing stock market before the majority listens to him.  
         Hilary Clinton is now off defending Planned Parenthood’s policy of selling aborted baby body parts to criminal doctors.  One Planned Parenthood doctor said on camera that there is a high demand for baby livers as she crunched on a salad and discussed her work experience “crunching” living fetuses.  Are the leaders of Planned Parenthood and their political supporters sick or what?  Hilary supports throwing away tax money on sick Planned Parenthood doctors even though Obama’s new law already pays for abortions.  So far Hilary still makes no sense at all but Bernie Sanders has come to her party’s rescue to set her straight.  So far, everyone who has attacked Donald Trump has done far greater damage to their own credibility than to his.  He started with nothing and has legally amassed one of the greatest individual world fortunes ever in spite of every political effort stop him all along the way.  His only failure has been his inability to teach others how to accomplish what he has done.  That is because other people give up too easily and Donald Trump does not.   Trump is not 99% bullshit like the current administration.

July 22, 2015    We warned months ago that the run up in stock prices in China were manipulated by the Communist government.  They gave up reporting accurate volume as well to make it more difficult to detect their fabricated stock values so that you could not tell that the price increase was not due to buying pressure.  Volume is essential to investing because if the price jumps 10% on a few communist government shares exchanged it is obvious the market is fixed.  In addition china’s ETF’s in the US began using fake volumes for the bull and bear ETF’s.  They went to a phony fixed ratio of volumes for YINN and Yang traded on May1, 2015 right after the Communists began their hyper-ridiculous-manipulation.  The manipulation is now so great it makes the Communist Party look ridiculous.  Buy communist party manipulated stocks at your own risk.  Russia is no better than China.
         Giant investment hedge fund Bridgewater Associates LP, has declared that China is no longer a safe place to invest.
         The socialist Japanese Toshiba Corp. accounting scandal is about padding pretax profit by at least $1.2 billion over six years.  All the top executives at the Japanese industrial conglomerate, which makes everything from faulty refrigerators to faulty nuclear reactors, apparently are in on it. Padding the books is how most socialist run companies get their stock prices to the current market bubble level but it is usually done legally making stupid but legal assumptions.  When the stock market collapses suddenly the executives get smart, sell their holdings and take the corporate losses to create at new bottom price so that they can buy back in low and restart padding of corporate income during the next bull market.  The socialists’ governments are so dumb the crooks go to the bank and never go to jail.
         Surprise-surprise!  Prices of homes are now higher than at any other time, including at the peak of the 2007 bubble just before the housing and stock market collapses.
         Beware again; the first downward leg of the new recession market could be very soon.  Early July is when much of the world goes on vacation and is oblivious to the news.  Declines in that period can be very steep and can be a buying opportunity if one gets out before the next decline.
 
        July 22, 2015    The Wall Street Journal today reported: the Chinese say that on July 7 they were only controlling only 96.8% (100-3.2% uncontrolled) of their stock prices in their market.  Otherwise it was a free market.  American housing is now being destabilized as it was in 2007 with low payment mortgages that kick in later.   Hackers have now demonstrated they can take control of self guided motor vehicles.  Hedge funds have introduced new ways to bet against markets when the stock market collapses that make more money than just directly shorting stocks.  These are all news today.
       Until now, when markets collapsed the US Treasury and FED never broke the buck as more socialist countries have at times.  But that can now happen if a major brokerage or other non-bank firms go bankrupt since they have limited insurance.
       We are approaching the most risky two weeks of the summer when major declines have occurred.  These declines happened twice during the Obama administration but are small compared to the next Obama economic decline we anticipate later this year.   We are now seeing corporations biting the bullet and honestly reporting recent sales/earnings declines instead of cooking their books and that is an indication that the stock market balance sheet bath is just beginning.  All the DOW indicators (stocks, rails, utilities) are in decline and only the fringe unproven/untested concept technology stocks have pushed higher.  That is the end game pattern for a bull market.  The FED is now actively trying to skinny down overextended banks.
 
       July 21, 2015   Fed Chairwoman Janet Yellen said that the new stress test goal is to force banks either to shrink or to hold substantially more capital to reduce risk of a meltdown.  The FED has assigned a higher capital holding requirement for larger banks.  It is evident the FED sees the imminent risk of a financial meltdown and depression not inflation.
        The new deal Obama gave Iran will Iranian their oil output this year increasing the pressure on the oil cartel to further lower prices.
Commodities are most vulnerable as currencies become volatile and recession and deflation hits the BRICS.
The DJI and DJR have joined the broadest NYSE market in beginning to roll over and decline.  Only the NASDAC, the most volatile index has hit new highs in recent months and it has the most hyped and manipulated earnings statement companies of all. 
IBM, the world's largest technology services company continued to see revenues fall for the 13th consecutive quarter.
       July 20, 2015   Just five days ago we warned that gold was still historically high in its multi decade cycle.  It peaked with both stupid party presidents Jimmy Carter and Hussein Obama.  Gold bugs know that political dunces throw hard earned money at everything and don’t understand how anyone makes an honest living.  Gold prices just plunged 4 percent to $1,088.05 an ounce their lowest in more than five years today as sellers in China dumped some of the metal.  India will soon start doing the same.  Gold could drop about 30% before it bottoms.   The Shanghai Gold Exchange volumes soared to a record.  It broke its support levels so there is more to follow.   Gold rises during inflation and plunges during recessions and the looming depression.  FDR blamed Herbert Hover for his Great Depression and Obama is still blaming Bush for Obama’s evolving Great Depression.  The sale of gold is a precursor to anticipated deflation or depression.
              Donald Trump is under attack from the establishment.  Senator McCain referred to Trumps 15000 person speech (to what included thousands of veterans in McCain’s home state) as a turnout of a bunch of "crazies."   Yes, McCain called veterans who voted for Senator McCain "crazies."   Trump responded that McCain may be a war hero but Trump prefers the “heroic heroes” because all combat veterans are probably as heroic as Senator John McCain.   Both politicians McCain and John Kerry were great heroes according to themselves but McCain had no witnesses.   John Kerry’s boasting of heroism was refuted in a book written by all the men who witnessed and served with him.   If every American would read John Kerry’s book about Vietnam they would throw this entire administration out.  Read what Kerry wrote that his co-soldiers did to Viet Cong nurses with dynamite sticks.   Then you will ask how could a person like Kerry be allowed to negotiate with enemies sworn to kill Americans?  So far the stupid party media has been doing its best to slander Donald Trump but it has helped Trump’s ratings soar.
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Sunday, July 12, 2015

July 17 2016 Obama and his “Stupid Party” continue to violate the public trust and use millions of dollars of taxpayer money to illegally infiltrate, monitor, and harass political opponents. Obama and Rahm Emanuel started first harassing several vocal media opponents which included Rush Limbaugh who had to commit himself to pain drug detoxification at a rehab facility before he shook them off. They went after the hunters with Fast and Furious which was first blamed on American gun owners and cost the lives of 30,000 innocent Mexicans in an armed drug war. They had the IRS attack tens of thousands of Americans in religious groups and American historical societies who the Stupid Party despises because they love God and Country. They used the NSA and tapped the lines of FOX newsmen because FOX is a bigger an enemy to the stupid party than ISIS which Obama says is not an Islamic terror group. They used the NSA supercomputer to analyze the recorded conversations of the illegally tapped lines of Governor Christy’s entire administration to (in just two weeks) pair up two random conversations of the Governor’s staff to smear their names and cause them to lose their jobs and to simultaneously smear Governor Christy’s name. Governor Scott Walker was continually illegally harassed by stupid party Democrats and today the Supreme Court ordered the stupid Democrats of the Stupid Party to no cease and desist further harassment of Governor Scott Walker of Wisconsin. Americans are fed up with creeps in the stupid party illegally using our National Security agencies while keeping confidential information on their personal computers to thwart National Security analysis. The WSJ had a less partisan article than the NYSE.

            With Hilary Clinton and all the gun control people in the Obama administration, how does any Moslem non-hunter get rifle much less automatic weapons?  Only the Moslem community has any supporters of ISIS.  How does any Moslem get approval to buy automatic weapons or explosives?  Only Hilary’s/Obama’s stupid party favors automatic weapons rights for Moslems but not hunters and veterans.
            Just to refresh memories, the cash flow (cf) into the broadest market (the NYSE) peaked in early July 2014.  The DJI cf peaked Dec 5, 2014.   The Std and Poors cf peaked March 24, 2015.   The NASDQ and Russell 2000 cfs peaked June 23, 2015. 
            A Planned Parenthood female doctor was caught on camera discussing how she saved aborted fetus body parts to illegally sell them for profit for Planned Parenthood.  She said she caused breech births to enlarge the birth canal to save the brain for sale.  She discussed how she crushed most organs during the abortion to make sure the baby would be dead.
            July 16 2015    Yellen has now run out of time for significantly raising rates and having a possible future reduction benefit.  The economy will be in decline soon and she won’t be able to raise rates once that happens.  Therefore the FED will be left with no strings to pull and will only be pushing on the string doing quantitative easing.   QE is equivalent to floating more debt to prepare for an eventual a run on the banks.   All the markets will likely be hitting resistance price levels in the coming month and on a cash flow level only the NASDAQ has an appearance of a perhaps a 10% chance of hitting its old high before then.  The rest appear to be over the hill.  It now appears highly probable that many investors will be in panic mode by this time next month.  Short sellers are smarter now and will likely cover their shorts near the bottom but this time they will have the strength to stop the next rally.  That will be the writing on the wall to many investors.  But the perennial bulls will not give up easily.   We now expect a “Sell! Sell! Sell!” capitulation this year… sometime after September.
            The problem with more debt is you encourage more risk taking such as with ridiculous IPO’s like Alibaba.   China has that money and is sitting on it.  We estimate that half the money that went into Alibaba will end up in the coffers of the Chinese Communist Party.  Does China cook the books?  Yes, we pointed that out for a few years and now it is obvious they manipulate not just their economic reports but also try to manipulate individual stocks and their stock market.  The Alibaba IPO was like stealing from clueless American children.
            Gold is still high historically.
            The MBA Mortgage Index 07/11 plunged -1.9% a swing of -6.5% in one month.
            The US international trade balance plunged again as the EURO got weak and the US$ got stronger.  A stronger dollar makes the price of oil drop for American drillers so they will want to pump even more.  It is expected the price of a barrel of oil will drop below $40 in this next downturn.
            For the segment of crooks that fraudulently filed returns and stole USA tax funds, 2015 was the best year in all history.  For the honest taxpayers who required help from the IRS, the filing season was by far the worst in all history.  We need to sweep the stupid party out of all of government and monitor and fire the Obama government employee deadbeats in 2016.  We have an economy that is transitioning from recession to a depression.   If that happens before the 2016 election the “stupid Party” will blame George Bush again.  We need to boot Obama’s stupid party out and get a competent President and a new FED chairperson and turn our economy around.
            July 14 2015    Yesterday’s rally has been weak in volume and off of a low market valuation for starters.  If it were a real rally it would have 50% to 200% higher volume.  China is on the verge of a recession.  The stupid people commenting on the market don’t believe China could have a recession because they think that trends perpetuate themselves indefinitely.  When economic bubbles implode they sink whole sectors of the economy and the malaise lasts 6 months to in Obama’s Stupid Party case, 8 years.
      Sales at U.S. retailers dropped in May were revised downward by 0.2% and fell -0.3% in June.  That is consistent with our assessment that Obama has put the economy on a path toward a deeper recession which could ultimately result in a Great Depression.
      America needs to throw out the “Stupid Party” and all their incompetent officials who are creating sanctuary cities for illegal immigrants.   Before America gained independence from England the State of Georgia was an American colony that took non violent criminals.   Australia was another British colony that took non violent criminals who stole primarily because they were hungry and poor.  Violent criminals did not go to prison or get deported.  They were tried and hung.   Our current stupid and incompetent American administration has sanctuary cities and ICE protects the dangerous illegal immigrants who are set free, deported, and then return and prey on more Americans.   
Bill Reilly proposed a new law, Kate's Law, to throw deported illegal immigrants in jail for five extra years each time they return after they are deported for crimes in America.
       The Stupid Party wants all the illegal immigrants to vote in the next American Presidential election so they are proposing that proof of citizenship not be required at polling places.  That is just how stupid they are and think other Americans are.  It would be a dictatorship of the proletariat.
 
            July 13 2015  Finally there is a successful person who understands what the problem is with America.  We have “stupid people running our government” so Donald Trump has deduced.  We have a president that went to Harvard to meet a quota and he has sealed his records so no one knows he was registered as a foreign student and he has sealed his grades for obvious reasons.   And we have several incompetent CEO’s who put their sex lives above their corporation’s success or even the first Constitutional Amendment, Freedom of Religion.  And the American response is overwhelming so far.   Many Democrats are starting to recognize the “Stupid Party” for what it is and they like Donald Trump for pointing out the stupidity of the leftists.   Trump set up a talk in Phoenix and more than 15000 people signed up so he had to change the venue to larger stadium.
          The six major indices we follow have not had a sustained rally for some time and all will have 65DM averages declining soon showing their price action has now topped.  The broadest indicator, the NYSE Market Cash Flow topped out in July of 2014 and gave the first sell signal October of 2014.   In the past the cash flow falloff has preceded the selling panic by up to a year giving plenty of time to adjust investments.
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Monday, July 6, 2015

July 10 2015 Today the WSJ reported today that economic growth throughout the world is now predicted to drop this year to the lowest levels seen since 2009. The contraction has begun already and China for the first time could see RED. Already China has discovered that trying to manipulate their stock market is fraught with danger. If they continue to harass stock sellers and short sellers no one will be willing to buy their stocks and rich entrepreneurs will retire and flee to the Free World. China could soon face a tremendous brain drain.

            We have talked many times about how during a stock market bubble corporations are pressured by some Mad Money stock commentators and hedge funds to distort earnings to artificially reduce their PE not by increasing profits.  Even Apple recently did the legal manipulation.  There are also ways to manipulate PE fraudulently like Enron did but there are legal ways extensively used to deceive and drop the corporation PE by going into debt (at current low interest rates) to buy back shares so that the earnings of each outstanding share increases substantially due to that manipulation.  This has allowed stock prices to reach yr 2000 and yr 2007 bubble levels without a corresponding increase to its P/E because the FED has flooded the stock market with cash to buy back their stock at a record low interest rate.  This is now entirely out of control.  Some American corporations are heavily in debt because the FED has kept interest rates at about a third of what they normally are during a market bubble.  Apple distorted their PE too by using their cash to buy back their stock.  Thus many corporations have completely distorted their PE ratios and could actually go bankrupt when this bubble pops and the economy declines or when interest rates increase.  Once the bankruptcies begin the creditors will see their risk and raise interest rates causing cascading waves of corporate insolvency.
            This Obama administration must now be the most racist administration in the history of America.  Kate Steinle was murdered by an illegal immigrant who had multiple violent crimes and deportations but her name is not even mentioned by Obama because she is not of the “right” color.  Another white man was filmed being beaten unconscious by a mob and again this administration says nothing about this obvious racism which has been put up on national TV.  Those American racist idiots would like to change the American Constitution because some of the signers owned slaves.  Those racists don’t know that it was warring African tribes that collected and sold their enemies as slaves to be shipped out, not the Europeans. 
Donald Trump claimed last night that Mexico is actually sending Mexican criminals to America just like Castro did when Castro emptied his jails.  Trump said the people who served in the Obama administration, including Hilary Clinton are stupid leaders and allow it.
            July 9 2015    The U.S. economy's stumble at the start of 2015 is dragging down the world's growth to the lowest level since the Great Recession, the International Monetary Fund said Thursday.  The number of permanently unemployed keeps increasing and the trade balance worsens.  Most of the US stock indices now show their 65 day moving average prices have peaked.  The cash flows for them peaked months ago.
Initial Unemployment Claims 07/04 297K up from last weeks 281K
Continuing Claims 06/27 2334K up from 2264K    
Trade Balance loss May -$41.9B up from -$40.7B last month 
            July 7 2015    Developing countries and emerging markets are taking big hits because the countries and corporations are not economically savvy.  Our analysis shows that the number of shares of stock sold on the Chinese exchange that are given with the long and short ETFs for Chinese stocks are phony numbers as of the end of April.  That means even the ETFs are ripping off investors using the phony fabricated communist investment information.  
            July 6 2015    Wall Street Ouija board market analysts the likes of Jim Cramer are calling for flat earnings to be the definition of corporate success for this quarter again.  By lowering expectations they expect that stupid greedy investors will continue to bid up prices.  This is just one more sign that the world stock markets are all overbought.  But unlike the financially ignorant commissars in China and Russia, Western Wall Street Ouija board market analysts cannot legally manipulate free markets.  Chinese and Russian stock markets are a disaster because communists are used to manipulating everything, and they don’t want let free enterprise run free.
            U.S. service firms grew at a slightly in June, as business activity and new orders increased.  The Institute for Supply Management said Monday that its services index edged up to 56 in June from 55.7 in May. Any reading over 50 indicates that services firms are expanding.  Many economists say the economy will expand slightly in the second quarter, after shrinking during the first three months of 2015.  Still, the index's hiring component slipped in June to 52.7 from 55.3 in May, which indicates that the rate of job growth might actually slow.
            Racism photographed by two men while two women with a man attack two other women with a child.  The man with the attacker hops around like an idiot.   No one including the two with cameras helps the woman who is attacked.  This is America under Obama.  What will it be like under Hilary? 
http://godfatherpolitics.com/23347/media-ignores-black-womans-vicious-attack-of-white-woman-with-toddler/#r9lqpmT1ZxMriL2d.99
            July 5 2015    The US FED has been printing money in anticipation of a breakdown of the world credit system and our US national debt more than doubled since 2006.   But the money supply has more than tripled!  Warren Buffet has begun moving his investments into a basket of foreign currencies.    The fear is there will be massive dumping of the dollar if a basket of currencies takes the place of the dollar as Warren Buffet thinks.  Even if the dollar made up 25% of the new trade currency it means foreign government banks would dump 75% of their dollars.   And if any US banks and brokerage firms were shut down the accounts are only insured to a maximum of $200,000 per account and some accounts are not insured at all.  We will lose anything over the $200,000 insured value.  Many accounts aren’t insured by the FED.   Price inflation will negate rising stocks as the world faces a crisis similar to Greece.  The average US citizen already carries far more national debt than the average Greek citizen.
 
            Factory orders in May fell 1% after falling 0.7% in April.  They are still declining year after year and at an all time low for the Obama years of decline.
 
            We were correct!   The Chinese Communist Party has admitted manipulating their stock market for several months causing a bubble with the hope of drawing in US and EU investors to apparently give foreign investors and Chinese speculators a hair cut and generate a huge profit for the Communist Party.  Pending IPOs in China are now suspended, brokerage firms pledged $19 billion for a market stabilization program and the People’s Daily told people to “have confidence and patience, instead of losing their minds” as the Chinese government looks to stop the worst three-week slide in stock markets in more than two decades. The Shanghai Composite Index has fell 29 percent since June 12 after surging more than 150 percent in a year.  The communists loved the recent bubble and thought they were now geniuses at manipulating capitalist markets.  But they didn’t think it was right that the bubble popped without Communist Party permission.   So they want the people to stop panicking and immediately start buying again so the government can liquidate some of the incredible debt they have run up building cities that have no people in them. 
            Texas wants its gold holdings held in Texas.  They are getting a little nervous about the invisible Obama recovery.
 
Losses will spiral if the Greek default causes a steep increase in borrowing costs for other debt-laden countries, such as Italy, Spain, and many nations other nations in South America, Asia, and Africa.  Interest rates could leap and even China could now be destabilized even as they already manipulating their Stock and financial markets.
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Friday, July 3, 2015

July 4, 2015 China’s government in a Freudian slip admitted they are manipulating the Chinese Stock market. The recession cycle has averaged about seven years and the last stock market peaks were in 2000 and 2007. So we are due for a major correction. Chinese stocks tumbled again losing more than 10 percent last week. After a slump of nearly 30 percent in Chinese stocks since mid-June, the China Securities Regulatory Commission (CSRC) regulator said it was investigating suspected illegal market manipulation aimed at heading off a full-blown stock market crash. Only legal Chinese government manipulation is allowed. After market close, a CSRC spokesman said China would cut IPOs to help stabilize prices. It also said China's official speculative margin lending for stock purchases would be quadrupled to $16 billion to expand speculation.


            A flurry of policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, failed to prevent the sell-off.  The People's Bank of China (PBOC) also provided 250 billion Yuan to ensure adequate liquidity in the system.  Fu Xuejun, at Huarong Securities Co, said that a market crash would be a disaster for the communists trying to control prices.  The Shanghai Composite Index shed 5.8 percent on Friday.  For the week, the CSI300 lost 10.4 percent and the SSEC fell 12.1 percent.  Chinese stocks had more than doubled between November 2014 and mid-June, fuelled largely by small inexperienced retail investors using margin accounts.  Sources said China suspended 19 accounts from short-selling for a month.  The government is encouraging more pension funds to invest in speculative stocks just when the market is at its seven year peak.



 


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